Metso investor opposes Weir’s merger offer

ENGINEERING firm Weir yesterday confirmed it had approached Metso with a merger plan, but one of the Finnish rock-crushing firm’s top investors has already threatened to scupper a deal.

Glasgow-based Weir’s shares slipped on confirmation of the proposal, while shares in Metso soared by a fifth on hopes of a multi-billion pound tie-up.

“Metso is currently not and has not been engaged in discussions with Weir although it is in the process of considering Weir's proposal,” said Metso.

Finland’s state investment fund Solidium, which holds an 11 per cent stake, said the firm is better off independent. “I don’t think this is the right time to sell Metso to Weir Group, or to sell it to anyone,” Solidium’s Kari Jarvinen said.

Weir said that there is “a strong strategic rationale” for the all-share merger proposal, which would create “significant efficiencies and synergies”.

Analysts said that a deal, which would create a dual-listed company worth £8.5bn, could mark the return of M&A activity among industrial companies.

Canaccord Genuity researchers said the tie-up could produce €300m in savings, prompting other firms to take a look at the merits of acquisitions.

A team at Bank of America Merrill Lynch, led by Peter Luck, and at UBS, headed up by Tim Waddell, are understood to be advising Weir on the bid.